2026 (4) TMI 1251

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.... the assessee. However, an adjournment petition has been filed which is rejected. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record. 3. The brief facts in this case are that the assessee is an individual and filed his return of income on 31.10.2023 declaring total income at Rs. 85,07,030/- for A.Y.2023-24. At the time of assessment proceedings, the assessee had filed bank account statement maintained by the assessee, copy of form 26AS along with copy of ITR and computation of income, ledger accounts for the unsecured loans along with confirmation and proof of creditworthiness, details of stock inventory and other relevant documents. That on perusal of the t....

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....there is no cessation of liability u/s.41(1) of the income tax Act. The PAN of the creditor is AABCE3309E and its office is at MIG-D-18, Shailendra Nagar, Raipur (C.G.). Due to dispute of Rs.2,000/- the assessee firm has stopped the payment and therefore the balance of Rs.12,000/- is appearing. You are kindly requested to accept the same. Document is enclosed Marked as Annexure-A ... 2. In the case of Gangpur Diesel We are enclosing herewith copy of ledger account of the creditor duly confirmed ason date. The creditor has provided engine repairing services to the assessee. The liability of the creditor as on date is very much there and there is no cessation of liability u/s.41(1) of the income tax Act. The PAN of the credi....

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....ment, address, thereafter, if the A.O was not satisfied, it was incumbent upon him to conduct further inquiry. Rather, he chooses to sit on these documents and give opinion which is purely based on suspicion and guess work. There is no finding either by the A.O or by the Ld. CIT(Appeals)/NFAC as to the applicability of Section 41(1) of the Act for the addition for cessation of liability. In fact, in the written submission the assessee mentions about a dispute after which financial transactions with the said concerns were stopped. The Department should have enquired on these submissions and their genuineness instead made additions summarily and in routine perverse manner. That when the entire liability and the details of the creditors have b....